The law department is only one part of the company

The law department is only one part of the company is Mike O’Horo’s first post on Dialogue for 2018. In it Mike addresses a crucial question: “In corporations, who is the client?” and shares his views on how to manage both GCs and c-suite executives. Our research shows there are a few key differences in the criteria lawyers use when appointing a BigLaw firm compared with those of their line manager colleagues, more on this in the Comments on Mike’s post. 

During the 20-year boom market, when lawyers could rely on a steady stream of work from in-house counsel, deciding who deserved your attention was pretty easy. If you had a relationship with a GC, or senior in-house counsel, you were set, and you protected that relationship as the revenue-generating asset it reliably was. Now, though, the game has changed, and it’s time for lawyers to reconsider their loyalties.

Some years back, I remember reading a blog post by a client-feedback consultant containing quotes from GCs, citing specific lawyers’ relationship-building behaviors.

IMO, one lawyer cited went overboard with GC-loyalty. The GC said “It’s not uncommon for outside counsel to curry favor with management, but never break [lawyer] ranks. Law firms aren’t always that way with in-house counsel.” It’s certainly prudent to know the psychology and politics of the client company and be known as someone who watches your client’s back, and not pursues business in ways that cause friction, you also must recognize the difference between trust-violating pitches and beneficial communication.

Unnecessary myopia

Personally, I’d describe communicating solely with the Law Department as myopic, the Law Department is only one part of the company. Doing so subjects outside counsel to some very real risks and constraints, such as being:

• trapped in the past, largely ignorant of emerging issues,
• aligned with those who must follow the rules instead of those who make the rules,
• aligned with a cost center instead of a profit center,
• feeding solely from the legal budget instead of operating budgets, which are much, much larger, and
• vulnerable to a change of GC.

In-house counsel are employees of the company. The company pays you. You represent the company. Your job is to help the company achieve its

• strategic aims,
• operational goals, and
• financial objectives…

…within the culture of the company

Once you’ve done all that to the degree that you’re able and permitted, you’ll naturally want to help employees succeed professionally. That’s where “watching someone’s back” comes in.

This cuts both ways. In-house counsel who prohibit or discourage outside counsel contact with operating executives are short-sighted, too.

Earning access

One of the client teams we guided faced exactly this type of choke-hold, i.e. they were only allowed to speak with in-house counsel. They earned their way out of this constraint by initiating discussions about high-impact emerging industry issues too new for the Law Dept. to be knowledgeable about. In-house counsel, uncomfortable with their potential blind spot, recognized that their self-interest was best served by including relevant operating executives in the discussion. This produced three winners:

• Operating executives could engage their inside/outside lawyers on the most important topics, using that perspective and judgment to avoid potential minefields
• In-house counsel’s status was elevated with operating executives, who appreciated their vision and initiative and saw them as more relevant to the issues that counted most
• Outside counsel earned access to operating executives, reinforcing their intelligence-gathering-and-sharing capability

The Law Dept. is not the company. It is one functional unit, no more. Limiting your relationship-building to them is as narrow and short-sighted as would be focusing solely on any other single entity, e.g., Finance, or Engineering. Your job is to help the business succeed.

Make them look good

The skill is doing this without triggering knee-jerk fear responses by inside counsel who interpret any deviation as a threat or violation of protocol. This is simple. Discuss the emerging business problem with counsel first. If you’re monitoring their industry, and other macro trends that affect other industries – and can reasonably be projected to affect theirs, too – unless in-house counsel is notably well informed, you’re likely to trigger their discomfort with the risk of ignorance rather than discomfort with your behavior. They’ll recognize the benefit of raising forward-looking ideas with their internal clients, but will feel more comfortable doing so with your well-informed assistance.

You’ll make them look good to their clients. If you make a habit of this, you’ll position yourself as someone who’s always relevant and usefully insightful. Your emails will be seen as gifts to open eagerly, your calls as opportunities to enhance their internal status. Over time, they’ll trust you with access to their internal clients, knowing that you’re merely engaging them in discussions about the business, not pitching them behind the Legal Dept’s back. Since you met them through in-house counsel, you create a reinforcing loop in which in-house counsel gets credit for whatever wisdom you deliver.

This is the practical definition of adding value. Compared to this, pitches are offensive.

Author of The law department is only one part of the company

Mike O’Horo is a co-founder of RainmakerVT, a service through which lawyers learn by doing in a virtual world.

Mike may be contacted by email at mikeohoro@rainmakervt.com and follow him on Twitter: @rainmakervt.

The Law Dept. is only one part of the company was first published on Mike’s blog on January 9, 2018.